7 Stocks Ripping Higher on Unusual Volume

WINDERMERE, Fla. ( Stockpickr) -- Professional traders running mutual funds and hedge funds don't just look at a stock's price moves; they also track big changes in volume activity. Many times when above average volume moves into equity it precedes a large spike in volatility.

Major moves in volume can signal unusual activity, such as insider buying or selling -- or buying or selling by "superinvestors."

Unusual volume can also be a major signal that hedge funds and momentum traders are piling into a stock ahead of a catalyst. These types of traders like to get in well before a large spike, so it's always a smart move to monitor unusual volume. That said, remember to combine trend and price action with unusual volume. Put them all together to help you decipher the next big trend for any stock.

From a technical perspective, IMOS is moving sharply to the upside here with decent volume. This move is quickly pushing IMOS within range of triggering a near-term breakout trade. That trade will hit once IMOS takes out $13.36 to $14.71 with high volume.

Traders should look for long-biased trades in IMOS as long as it's trending above today's low of $12.32, and then once it sustains a move or close over $13.36 to $14.71 with high volume. Look for a sustained move or close over those breakout levels with volume that's near or above 185,355 shares. If that breakout triggers soon, then look for IMOS to re-test and possibly take out its next major overhead resistance level at $15.76.

Elizabeth Arden

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Elizabeth Arden ( RDEN) is a beauty products company with a range of portfolio of fragrance, skin care and cosmetics brands. This stock is trading up 4% at $45.79 in recent trading.

From a technical perspective, RDEN is bouncing to the upside here with above average volume. This move is following yesterday's monster gap up which took RDEN from $39 to $47.50.

Traders should now look for long-biased trades in RDEN as long as it's trending above $44, and then once it triggers a breakout above $47.50 with high volume. Look for a sustained move or close above $47.50 with volume that's near or above 172,984 shares. If we get that action soon, then look for RDEN to hit $50, or possibly even north of $50. Keep in mind that this is a short-term trading call, since RDEN is a bit overbought with a current relative strength index reading of 78.

Insulet

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Insulet ( PODD) is a medical device company. Insulet develops, manufactures and markets an insulin infusion system for people with insulin-dependent diabetes. This stock is trading up 2.5% at $20.61 in recent trading.

Today's Volume: 344,000

Average Volume: 324,781

Volume % Change: 85%

Shares of PODD are ripping higher today after Canaccord Genuity reiterated its buy rating on the stock and issued a $24.50 price target.

From a technical perspective, PODD is moving back above its 50-day moving average of $20.16 with above average volume. This stock has also started to flirt with breaking out, since PODD briefly challenged some near-term overhead resistance at $20.73. At last check, shares of PODD have hit an intraday high of $21.02 but it has since then pulled back near $20.60.

Traders should now look for long-biased trades as long as PODD is trending above its 50-day at $20.16, and then once it breaks out above more resistance at $21.42 to $21.92 with high volume. Look for a sustained move or close above those levels with volume that's near or above 324,781 shares. If that breakout triggers soon, then look for PODD to re-test or possibly take out its next major overhead resistance level at $23.33.

Home Inns & Hotels Management

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Home Inns & Hotels Management ( HMIN) is an economy hotel chain in the People's Republic of China. This stock is trading up 4.8% at $22.20 in recent trading.

Today's Volume: 344,000

Average Volume: 372,580

Volume % Change: 75%

Shares of HMIN are moving higher today after the company reported its earnings results on Thursday. The firm reported earnings per share of 34 cents for the quarter, beating Wall Street estimates of 31 cents per share. The company's quarterly revenue was up 60.2% on a year-over-year basis.

From a technical perspective, HMIN is bouncing hard here right off some previous support at $21 with decent volume. This move is quickly pushing the stock within range of triggering a near-term breakout trade. That trade will hit once HMIN takes out some near-term overhead resistance levels at $25 to $25.95 with high volume. That $25.95 level is HMIN's 200-day moving average.

Traders should now look for long-biased trades once HMIN sustains a move or close above $25 to $25.95 with volume that's near or above 372,580 shares. If we get that action soon, then look for HMIN to re-test or possibly take out its next major overhead resistance level at $27.41.

Open Text

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Open Text ( OTEX) is engaged in providing enterprise content management software solutions. Open Text builds software that combines collaboration and process optimization. This stock is trading up 10.2% at $54.45 in recent trading.

Today's Volume: 1,121,000

Average Volume: 384,133

Volume % Change: 419%

Shares of OTEX are ripping higher today after the Raymond James reiterated its outperform rating on the stock and raised its price target from $67 to $72. Raymond James noted, "Open Text reported results of $306 million and $1.17 of earnings per share, more or less in-line with consensus of $309 million on earnings per share of $1.16. License sales of $78 million were slighting ahead of estimates of $77 million.

From a technical perspective, OTEX is soaring here with monster volume, and the stock has started to move above its 200-day moving average of $53.81.

Traders should now look for long-biased trades as long as OTEX is trending above $53.21 to its 200-day moving average of $53.81 with strong upside volume flows. I would consider any upside volume day that registers near or above 384,133 shares as bullish. If OTEX can hold a trend above those levels, then look for this stock to re-test and possibly take out its next major overhead resistance level near $58.

Nuance Communications

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Nuance Communications ( NUAN) is a provider of voice and language solutions for businesses and consumers around the world. This stock is trading up 3.4% at $23.43 in recent trading.

Today's Volume: 2.8 million

Average Volume: 4.1 million

Volume % Change: 50%

From a technical perspective, NUAN is bouncing to the upside here right off some near-term support at $22 with decent volume. This move is quickly pushing NUAN within range of triggering a major breakout trade. That trade will hit once NUAN takes out some near-term overhead resistance at $23.80 to $24 with high volume.

Traders should now look for long-biased trades once NUAN sustains a move or close above those levels with volume that's near or above 4,048,090 shares. Keep in mind that it will be helpful for NUAN to also take out its 200-day moving average of $24.42 with volume. If all of those levels get taken out soon, then look for NUAN to re-test or possibly take out its next major overhead resistance levels at $25.88 to $26.85.

Shares of STX are moving notably higher today after Lizard Capital started coverage on the stock with a $38 price target.

From a technical perspective, STX is ramping higher here with decent volume. This move is coming after a massive run higher, since STX has soared from its June low of $21.62 to today's high of $34.24. This move has also pushed STX into extremely overbought territory, since its current relative strength index reading is 80.20.

Traders should now only look for long-biased trades if STX is trending above its recent breakout level of $32.55 with strong upside volume flows. I would consider any upside volume day that registers near or above 13,080,800 shares as bullish. If STX can hold that trend, then this stock could hit $35 to $40 in near future.

However, considering how overbought STX is, traders might want to look for short-term short trades if that breakout level fails to hold.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.